"Financial Services Commission considers capital-market-style regulation for governance of virtual asset exchanges"

Financial authorities are reportedly considering measures to overhaul equity regulations, such as major shareholder suitability reviews, for virtual asset (cryptocurrency) exchanges by treating them as key market infrastructure.

According to industry sources on the 30th, the Financial Services Commission reportedly classified major domestic virtual asset exchanges as core infrastructure for virtual asset distribution in materials related to the 'Digital Asset Basic Act' recently reported to the National Assembly, and included such content. There is a possibility that exchange governance reform measures could be included in the so-called 'virtual asset phase 2 legislation,' which includes stablecoin issuance requirements and market legalization.

The report pointed out the problem of a structure in which a small number of founders and shareholders exercise excessive influence over overall exchange operations. It recognizes that ownership structures concentrating large operational revenues, such as fees, in specific individuals or a small number of shareholders need improvement in terms of user protection and market trust.

Accordingly, the FSC is reported to have proposed introducing a regulatory framework for virtual asset exchanges similar to the major shareholder suitability review system applied to Alternative Trading Systems (ATS) under the Capital Markets Act. Measures under consideration reportedly include restricting ownership concentration thresholds within a certain range and institutionally strengthening the transparency of exchange governance.

Under the current Capital Markets Act, Alternative Trading Systems cannot hold more than a certain percentage of voting shares, including those of special related parties, and additional holdings are allowed only with financial regulator approval in exceptional cases. The Financial Services Commission says it could design a regulatory framework for virtual asset exchanges with reference to this structure.

Meanwhile, some suggest there may be pressure to adjust ownership structures centered on large exchanges. However, observers say that specific application targets and criteria, and the timing of implementation, will require further discussion in the future legislative process.